Module 10: Restricted Merchant Categories (MCCs) and Real Merchant Behavior
🧠 Learning Objectives
By the end of this module, you will:
Understand what MCCs (Merchant Category Codes) are and why they matter
Know how card issuers and networks use MCCs to enforce restrictions
Learn why even popular global merchants sometimes fail
Be able to build better user messages and decline handling
Reduce support escalations by proactively communicating MCC-related issues
What Is an MCC?
An MCC (Merchant Category Code) is a four-digit code assigned by card networks (like Visa or Mastercard) that classifies the type of business a merchant operates.
Examples:
| MCC | Description |
|---|---|
| 5815 | Digital streaming services |
| 7995 | Gambling & online betting |
| 4829 | Money transfer & remittance |
| 6211 | Security brokers & investment platforms |
| 7801 | Government-licensed gambling (US) |
| 5966 | Telemarketing |
Every time a user makes a card transaction, the merchant’s MCC is sent along with the authorization request.
That MCC is used to:
Determine risk level
Apply fraud rules
Enforce regulatory restrictions
Log transaction types for internal analytics
Why Are Some MCCs Blocked?
Card issuers and card processors (like Bitnob’s partners) often enforce MCC restrictions to:
Comply with licensing and financial regulation
Prevent money laundering and card testing
Avoid high-risk or high-dispute industries
Follow the rules of the card network or issuing bank
These are not personal — they are systemic.
Even if a user has full balance, a card may be declined if:
The MCC is on a blocklist
The merchant has a pattern of refund abuse or dispute volume
The card product itself is not approved for that category
Commonly Blocked Categories
| MCC | Description |
|---|---|
| 7995 | Gambling, betting, online gaming |
| 6051 | Crypto, foreign exchange, debt repayment |
| 7273 | Dating services |
| 5966 | Telemarketing |
| 7801 / 7802 | US-based licensed casinos, racing, government lotteries |
| 4829 | Peer-to-peer money transfer platforms |
| 6211 | Securities and brokerage payments |
If your user tries to pay at a merchant classified under these MCCs, the transaction will fail automatically, even if the merchant looks reputable (e.g., Binance, Tinder, DraftKings, etc.).
Why Some Well-Known Merchants Fail Unexpectedly
Sometimes, users will report:
“My Facebook Ads payment failed.”
“Netflix is declining even though I have balance.”
“AliExpress charged me a cross-border fee.”
These often aren’t product bugs. They’re MCC, acquiring bank, or routing issues.
Real examples:
| Merchant | Common Problem |
|---|---|
| Facebook Ads | May route through EU acquiring banks, triggering cross-border or FX fees |
| Netflix | May run recurring billing with expired tokens or soft retries |
| Shein / Temu | Sometimes use non-U.S. acquirers, leading to cross-border fee or MCC mismatch |
| Binance | May be classified as 6051 (non-fiat currency), blocked at scheme level |
| PayPal | May hold payment before release; shows as authorization-reversal in logs |
Handling Merchant-Specific Behavior
Build your product to:
Display failure reason clearly (e.g., “Merchant not supported by card issuer”)
Maintain a soft blocklist of merchants known to cause issues
Pre-educate users before they try spending on high-risk MCCs
Provide links to alternatives when spending fails (e.g., gift card platforms)
UI and Support Guidance
| Scenario | User-Facing Message |
|---|---|
| MCC is blocked | "This merchant type is not supported by your virtual card for regulatory reasons." |
| Unknown decline | "The merchant declined your payment. This may happen with some international or high-risk platforms." |
| Known problem merchant | "Payments to this platform are often blocked due to how they route transactions. We recommend trying a different payment method." |
Avoid vague errors like “Transaction failed. Try again later.” Users need clarity, not placeholders.
How to Monitor MCC Issues Internally
Log and tag every declined transaction by MCC
Build analytics to see:
Which MCCs are most declined
Which merchants trigger auto-termination
Which declines occur despite full balance
Train support and ops teams to recognize MCC-linked failures
Include MCC in your admin dashboard view of each transaction
Advanced Strategy: MCC-Aware Card Routing
Some advanced platforms (especially B2B card issuers) implement MCC-aware logic:
Create a different card per merchant category
Warn users if they’re attempting a restricted transaction
Pre-check MCCs based on historical data
This may not be necessary for your first version, but it becomes useful at scale.
Recap
MCCs define what kind of merchant the card is interacting with
Many common platforms use MCCs that are restricted by default (especially in crypto, gaming, and remittances)
You must design for clear user messaging, internal visibility, and policy-driven handling
This is one of the top sources of card failures, and misunderstanding it creates support escalations and user frustration
